SOUTHERN FURNITURE LEASING, INC., Plaintiff - Appellant, v. YRC, INC.; ROADWAY EXPRESS, INC.; YELLOW TRANSPORTATION, INC.; YRC WORLDWIDE, INC., Defendants - Appellees.
No. 19-3262
UNITED STATES COURT OF APPEALS FOR THE TENTH CIRCUIT
March 3, 2021
PUBLISH. Christopher M. Wolpert, Clerk of Court.
Appeal from the United States District Court for the District of Kansas (D.C. No. 2:19-CV-02129-KHV-KGG)
Eric D. Barton, Wagstaff & Cartmell, LLP, Kansas City, Missouri (Nicholas W. Armstrong, Price Armstrong, LLC, Birmingham, Alabama, with him on the briefs), for Plaintiff - Appellant.
Stephen L. Hill, Jr. (Jacqueline M. Whipple with him on the brief), Dentons US LLP, Kansas City, Missouri, for Defendants - Appellees.
Before MATHESON, McHUGH, and EID, Circuit Judges.
Southern Furniture Leasing, Inc. (“Southern Furniture“) filed this putative class action against a group of less-than-truckload (“LTL“) freight carriers, all predecessors to or current subsidiaries of YRC, Inc. (“YRC“). Southern Furniture‘s allegation is that YRC “carried out a widespread and systematic practice of overcharging its customers by intentionally using inflated shipment weights when determining shipment prices.” App. 8.
The district court granted YRC‘s motion to dismiss on the grounds that Southern Furniture had only 180 days to contest the alleged overcharges under
I. BACKGROUND
A. Factual History
YRC is an LTL carrier. This means that YRC “consolidate[s] shipments that do not themselves constitute a full trailer to transport and deliver, generally for manufacturing and retail businesses.” App. 18.
A business that wants to contract with YRC for shipping must use its pre-printed two-page form contract, where the only blank terms are for the customer‘s contact information and the weight of the shipment. The two-page contract “provides that the weight entered is ‘[s]ubject to correction,’ and that ‘[i]f the description of articles or other information on this bill of lading is found to be incorrect or incomplete, the freight charges must be paid based upon the articles actually shipped.‘” App. 18 (alterations in original).
YRC does not always rely on a customer‘s weight estimate when it assesses charges. Rather, the industry standard is for YRC to charge based on actual weight if it reweighs the shipment in question.
If the actual weight is greater than the customer‘s weight estimate, that is a “positive reweigh.” App. 19. Conversely, if the actual weight is less than the customer‘s weight estimate, that is a “negative reweigh.” App. 19.
Starting in September 2005, YRC eliminated negative reweigh corrections, resulting in overcharges. YRC did not, however, inform its customers about its revised reweigh policy.
In December 2018, the Department of Justice unsealed a qui tam complaint that revealed YRC‘s reweighing scheme. Only then did Southern Furniture learn that YRC had been overcharging its customers.
B. Procedural History
On March 8, 2019, Southern Furniture filed a complaint for damages and injunctive relief in the District of Kansas against YRC, Roadway Express, Yellow Transportation, and YRC Worldwide. YRC then filed a motion to dismiss.
The district court had not yet ruled on YRC‘s motion when Southern Furniture filed an amended complaint. The amended complaint alleged (1) breach of contract; (2) breach of the duty of good faith and fair dealing; (3) unjust enrichment; and (4) violations of the Florida Deceptive and Unfair Trade Practices Act. YRC again moved to dismiss. Specifically, YRC argued that Southern Furniture had failed to comply with
On October 31, 2019, the district court granted the motion to dismiss and entered judgment in favor of YRC. The district court first rejected YRC‘s standing and amount-in-controversy arguments. With respect to standing, the district court determined that Southern Furniture‘s amended complaint alleged a concrete injury based on overcharges for shipments. And with respect to the amount in controversy, the district court determined that Southern Furniture‘s amended complaint
Next, the district court determined that Southern Furniture‘s alleged overcharges were governed by and did not comply with the 180-day limit set forth in
II. DISCUSSION
On appeal, Southern Furniture argues the district court erred in dismissing its amended complaint for failure to state a claim. Specifically, Southern Furniture contests the district court‘s conclusion that
A. Standing
YRC argues that Southern Furniture‘s amended complaint is so vague as to the details of Southern Furniture‘s dealings with YRC that it fails to allege an injury in fact. We disagree.
The Constitution extends the “judicial Power” only to “Cases” and “Controversies.”
“At the pleading stage, general factual allegations of injury resulting from the defendant‘s conduct may suffice.” Defs. of Wildlife, 504 U.S. at 561. “However, ‘[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.‘” COPE v. Kan. State Bd. of Educ., 821 F.3d 1215, 1221 (10th Cir. 2016) (alteration in original) (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)).
We agree with the district court that Southern Furniture has alleged an injury in fact. The amended complaint alleges that, “[l]ike thousands of other small businesses across the country, [Southern Furniture] contracted with YRC to ship goods pursuant to a standard, pre-printed bill of lading.” App. 9. Under that contract, the price “was based in part upon weight on multiple occasions.” App. 11. When YRC eliminated negative reweighs, Southern Furniture “pa[id] more for shipments than [it] should have.” App. 20-21. From those allegations it is reasonable to infer that Southern Furniture contracted with YRC after 2005 but before 2018, i.e., during the period when YRC had secretly eliminated negative reweighs. See Iqbal, 556 U.S. at 678 (“A claim has facial plausibility when the plaintiff
B. Section 13710(a)(3)
The statute at issue in this appeal -
Today,
(A) Initiated by motor carriers.-
In those cases where a motor carrier (other than a motor carrier providing transportation of household goods or in noncontiguous domestic trade) seeks to collect charges in addition to those billed and collected which are contested by the payor, the carrier may request that the Board1 determine whether any additional charges over those billed and collected must be paid. A carrier must issue any bill for charges in addition to those originally billed within 180 days of the receipt of the original bill in order to have the right to collect such charges.
(B) Initiated by shippers.-
If a shipper seeks to contest the charges originally billed or additional charges subsequently billed, the shipper may request that the Board determine whether the charges billed must be paid. A shipper must contest the original bill or subsequent bill within 180 days of receipt of the bill in order to have the right to contest such charges.
Southern Furniture advances three reasons why its amended complaint is not subject to
1. Section 13710(a)(3) applies in court.
Southern Furniture‘s main argument for why
“Our primary task in construing statutes is to determine congressional intent, using traditional tools of statutory interpretation.” In re Taylor, 737 F.3d 670, 678 (10th Cir. 2013) (quotation marks omitted). “Supreme Court ‘precedents make clear that the starting point for [the] analysis is the statutory text.‘” Id. (alteration in original) (quoting Desert Palace, Inc. v. Costa, 539 U.S. 90, 98 (2003)).
a. Plain Language
Subsections
Nothing in
A shipper may contest charges before the STB, in federal court, or in other fora. “Contest,” when used as a verb, is not specific to litigation. It means “[t]o litigate or call into question.” Contest, Black‘s Law Dictionary (11th ed. 2019) (emphasis added). So,
If Congress had meant to restrict the time limit to actions before the STB, it could easily have done so. For example, Congress could have ended the phrase “in order to have the right to contest such charges” with the words “before the STB.” But it did not write the statute that way, or otherwise draw a connection between the time limit and the STB. It is not our job to “add to, remodel, update, or detract from old statutory terms.” Bostock v. Clayton Cty., Georgia, 140 S. Ct. 1731, 1738 (2020).
The statute‘s mandatory language makes the right to contest or collect charges conditional on compliance with the time limit. One definition of “must,” when used as a verb, is to “be obliged to.” Must, Merriam-Webster, https://www.merriam-webster.com/dictionary/must (last visited October 5, 2020). Quite simply, compliance with the 180-day time limit is not optional.
b. Scope-of-Subparts Canon
Southern Furniture argues that
The premise of Southern Furniture‘s argument is incorrect. Section 13710(a)(3) speaks both to optional proceedings before the STB and to the time limit for collecting or contesting charges. The entire subsection is indented in two parts, (A) and (B), and there is no modifying language that appears before or after the indents.3 Consequently, to the extent the scope-of-subparts canon tells us anything, it teaches that all of subpart (A) applies to actions “Initiated by motor carriers,” while all of subpart (B) applies to actions “Initiated by shippers.” Accordingly, we find
nothing in the canon that requires us to construe the first sentence‘s reference to the STB as overriding our plain language interpretation of the second sentence.
c. Deference to the STB
To reiterate, the STB has interpreted
That is fitting, for it would be inappropriate for us to apply Chevron deference to the STB‘s interpretation. “As the Supreme Court explained in United States v. Mead Corp., 533 U.S. 218 (2001), the initial step of the Chevron inquiry is actually to determine whether Chevron should apply at all.” Sinclair Wyo. Ref. Co. v. U.S. EPA, 887 F.3d 986, 990 (10th Cir. 2017). We ask whether “Congress delegated authority to the agency generally to make rules carrying the force of law,” and whether “the agency interpretation claiming deference was promulgated in the exercise of that authority.” Id. at 991 (quoting Mead, 533 U.S. at 226-27).
In the context of the ICCTA, there is no evidence Congress intended to delegate to the STB the question whether the 180-day time limit applies in court. And it would be odd for Congress to make such a choice, given the fact that courts have just as much, if not more, expertise than administrative agencies in determining applicable time limits. That leaves us to apply Skidmore deference to the STB‘s interpretation. See Skidmore v. Swift & Co., 323 U.S. 134, 140 (1944) (citing “the thoroughness evident in [the agency‘s] consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade“). Yet, the STB‘s interpretation is grounded in nothing more than the plain language of the statute. So, the STB‘s interpretation does not add any additional force to our plain meaning analysis.
d. Section 14101(b)(2)
Southern Furniture asks that we look to
Southern Furniture‘s argument is unpersuasive. Section 14101(b)(2) establishes that if a shipper or carrier wants to allege breach of a contract described in
2. Southern Furniture is a Shipper.
Southern Furniture‘s next argument is that
The ICCTA does not define “shipper.” In the absence of a statutory definition, we rely on ordinary meaning. See Bostock, 140 S. Ct. at 1750. One ordinary meaning of “shipper” is “[s]omeone who contracts with a carrier for the transportation of cargo.” Shipper, Black‘s Law Dictionary (11th ed. 2019). Southern Furniture falls within this definition because, according to the amended complaint, Southern Furniture contracted with YRC to transport goods.
Southern Furniture resists this straightforward conclusion by invoking the ICCTA‘s definition of “individual shipper.” The ICCTA defines “individual shipper” as “any person who - (A) is the shipper, consignor, or consignee of a household goods shipment; (B) is identified as the shipper, consignor, or consignee on the face of the bill of lading; (C) owns the goods being transported; and (D) pays his or her own tariff transportation charges.”
Southern Furniture focuses on subsection (A) of this definition and argues that it is not an “individual shipper” because it does not ship “household goods.” The ICCTA defines “household goods” as
personal effects and property used or to be used in a dwelling, when a part of the equipment or supply of such dwelling, and similar property if the transportation of such effects or property is-
(A) arranged and paid for by the householder, except such term does not include property moving from a factory or store, other than property that the householder has purchased with the intent to use in his or her dwelling and is transported at the request
of, and the transportation charges are paid to the carrier by, the householder; or (B) arranged and paid for by another party.
Whether or not Southern Furniture is an “individual shipper,” does not bear on whether Southern Furniture is a “shipper,” as that term is used in
3. Southern Furniture‘s Amended Complaint Presents a Billing Dispute.
Southern Furniture‘s final argument is that
In common parlance, the amended complaint seeks to “contest . . . charges.”
The only time the phrase “billing dispute[]” appears in
In response, Southern Furniture cites Grocery Haulers, Inc. v. C & S Wholesale Grocers, Inc., No. 11 CIV. 3130 DLC, 2012 WL 4049955 (S.D.N.Y. Sept. 14, 2012) (unpublished). There, the district court held that
Our interpretation of the statute is also not in conflict with the Second Circuit‘s decision in U.S. ex rel. Grupp v. DHL Express (USA), Inc., 742 F.3d 51 (2d Cir. 2014). There, the Second Circuit held that the 180-day time limit “cannot apply to a
III. CONCLUSION
For the foregoing reasons, we AFFIRM the district court‘s dismissal of Southern Furniture‘s complaint.
Southern Furniture Leasing, Inc. v. YRC, et al., No. 19-3262
EID, J., dissenting.
The majority holds that Southern Furniture Leasing‘s state common law and statutory claims alleging that YRC1 engaged in a fraudulent scheme to overcharge its customers - including claims of breach of contract, breach of the duty of good faith and fair dealing, unjust enrichment, and deceptive trade practices - are time-barred under the 180-day limitations period contained in the Interstate Commerce Commission Termination Act of 1995 (“ICCTA“), Pub. L. 104-88, § 103, 109 Stat. 803, 877-78. But the language of the 180-day limitation,
As is industry standard for freight carriers, YRC contracted with its customers based on an estimated weight of their shipments and then later reweighed those shipments to determine their actual weights, adjusting charges accordingly. Southern Furniture alleges that, beginning in September 2005, YRC stopped adjusting customer charges downward when reweighs were less than initially estimated, while still adjusting upward when reweighs were more than the initial estimate - all without telling anyone.
Southern Furniture filed this putative class action suit after the Department of Justice unsealed a qui tam complaint revealing YRC‘s alleged scheme.
At the heart of this appeal is the interpretation of the following provision from ICCTA:
(3) Billing disputes.
(B) Initiated by shippers. If a shipper seeks to contest the charges originally billed or additional charges subsequently billed, the shipper may request that the [Surface Transportation Board] determine whether the charges billed must be paid. A shipper must contest the original bill or subsequent bill within 180 days of receipt of the bill in order to have the right to contest such charges.
view to their place in the overall statutory scheme.” Roberts v. Sea-Land Services, Inc., 566 U.S. 93, 100 (2012) (quoting Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 809 (1989)); accord Gen. Dynamics Land Sys. v. Cline, 540 U.S. 581, 596 (2004) (It is a “cardinal rule that statutory language must be read in context [since] a phrase gathers meaning from the words around it.” (quotations omitted)); Bd. of Cnty. Comm‘rs v. Suncor Energy (U.S.A.) Inc., 965 F.3d 792, 804-07 (10th Cir. 2020) (explaining that the meaning of statutory text must be ascertained through the context in which it exists).
The context at issue here - that is, the first sentence - makes clear that the 180-day limitation contained in the second sentence applies only to billing “contests” brought before the Surface Transportation Board. The first sentence does two primary things. It describes the kind of disputes that are subject to
Once it focuses in on the second sentence, which uses an unqualified “must,” the majority concludes the 180-day requirement applies in all situations where a customer contests a bill, even where the challenge is brought in a court action. Maj. Op. at 10. I agree with the majority that the 180-day limitation is “not optional.” Id. But the fact that compliance with the limitation is mandatory says nothing about the scope of the limitation in the first instance. The context of the limitation demonstrates that it applies only to billing contests before the Board. Similarly, while the majority suggests that Congress could have included language in the second sentence expressly confining the limitation to proceedings before the Board had it intended that meaning, id., there was no reason for it to do so, as the first sentence already indicates that the provision is addressing billing contests brought before the Board.
The majority‘s interpretation applying the 180-day limitation to all claims that might challenge a bill, rather than just those brought before the Board, is far too broad and impedes other parts of ICCTA with separate statutes of limitation. See Aulston v. United States, 915 F.2d 584, 589 (10th Cir. 1990) (“In interpreting statutes . . . we look to the provisions of the whole law.“). The majority concedes that
Congress made clear that “[e]xcept as otherwise provided in this part, the remedies provided under this part are in addition to remedies existing under another law or common law.”
disputes involving a bill virtually guts all state causes of action, like those brought here, that allege a fraudulent scheme to overcharge customers. That is because, by their very nature, fraudulent schemes to overcharge are typically concealed from the customer. Here, it is alleged that YRC did not inform customers that it was no longer making downward adjustments to initial estimates, all the while continuing to make upward adjustments. Fatal to Southern Furniture‘s claims, the majority holds, is the fact that the overcharges were reflected in the bills that Southern Furniture paid and failed to contest within 180 days. Yet customers like Southern Furniture only discovered that they had been allegedly overcharged once the qui tam action was released, years after they had paid the bills and long after 180 days has passed. Under the majority‘s interpretation, then, the sort of fraud alleged in this case simply cannot be addressed by state statutory and common law, in contradiction to the language of
“Adhering to the fair meaning of the text (the textualist‘s touchstone) does not
McHUGH
Circuit Judge